Healthcare's Big Challenge: How To Measure Value

Healthcare payers want technology developers to create systems that measure value. This time, tech is lagging social changes.

Healthcare Dives Into Big Data

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As the purchaser representative on the federal Health IT Policy Committee, David Lansky, PhD., is the voice of employers, insurers, and other organizations responsible for healthcare compensation.

It's a role he's handled for five years, one that complements his full-time position as CEO and president of Pacific Business Group on Health, a nonprofit business coalition that helps its 60 purchaser members provide coverage to more than 3 million employees by improving the quality and affordability of healthcare.

In both positions, Lansky focuses on improving the nation's healthcare delivery system by curtailing unnecessary spending and enhancing visibility by measuring outcomes and value. As healthcare providers move to care that is based on value rather than fees, it's imperative for payers to have tools to measure value, Lansky told InformationWeek. Without them, providers will default back to fee-based care and patients will again fall into a pattern of potentially unneeded tests, medications, and treatments.

"To assess value, we need to measure value in the way people who get care are treated," he said. "The goal is to measure what happens to the whole person across time and across space."

Employers want a more complete picture of workers' health beyond the snapshot they currently receive from healthcare providers, said Lansky. Rather than capturing data only when employees are sick and being treated, employees wish for a "longitudinal" measure that encompasses home, work, and wellness programs, he noted.

"For my members, value is getting the best possible outcomes for the necessary resources to be used. We understand healthcare can be expensive, so we want the most efficient use of resources to achieve the goal," said Lansky. "We're doing a little better on measuring cost. We're not doing much better on measuring value."

David Lansky of Pacific Group on Health also works on the federal Health IT Policy Committee.

With knee replacements, for example, measuring value would entail determining whether patients walk better six months after their operation, he said. Asthma treatments could be dubbed successful if a patient could sleep through the night, said Lansky. Depression medications work if patients return to their careers or once again participate in family life.

Today, however, payment systems are not set up to capture that information, Lansky said. Rather, they track which reatments doctors perform, the medications physicians prescribe, and the therapies clinicians recommend. Switching to a value-based system is a chicken-and-egg problem, and one of technology working to catch up with intent. "[If] the payment system generally is based upon measures of outcome, then everybody will work hard to make that possible. To the extent the payment system is primarily based on volume, technology and other partners in the system won't work hard on measuring outcome," Lansky said.

"There's now a pretty strong commitment to measure value and pay for value," he continued. "[But] the data infrastructure doesn't move quickly enough to permit that kind of value. The technology has to catch up to the changes in society. It's kind of ironic. In this case we have society -- everyone across the political spectrum -- and yet the data isn't there to support it. Technology is lagging the social commitment to health reform."

"They are requiring data to be submitted from those hospitals, including whether people are able to function six months after surgery," said Lansky. "After spending $20 billion on health IT in the past five years, we still can't expect, as a country, all hospitals to report these health measures."

Despite some frustration that technology isn't always tightly aligned, that many systems are closed, and data is often siloed within organizations, healthcare's adoption of technology has dramatically improved over the past five years, he said. The Centers for Medicare & Medicaid Services (CMS) should get credit for doing a lot with only the tools Congress provided them, said Lansky. Yet incentives and mandates can only go so far, he added.

"Some of the cornerstone tasks have been done very well [but] we haven't gotten people onto the digital platforms," said Lansky. "We have a healthcare system implementing technologies that is probably not very much different than they would have done 10, 15 years ago; in other words, automating paper processes. There's a gap between the way we're implementing these technologies and the [goals]. That gap is becoming greater, not smaller. To support the goals for society, to improve health and improve the healthcare system, we've got to support the innovative use of information technology and unfortunately, we're not doing that."

Pressure from patients -- who now account for a larger percentage of payment for their own care -- and employees, could prompt vendors to more quickly design software that captures, measures, and analyzes value. That will be good news for Lansky and the organizations he represents, and could reduce the overall cost of the nation's healthcare.

Download Healthcare IT In The Obamacare Era, the InformationWeek Healthcare digital issue on changes driven by regulation. Modern technology created the opportunity to restructure the healthcare industry around accountable care organizations, but ACOs also put new demands on IT.

Alison Diana has written about technology and business for more than 20 years. She was editor, contributors, at Internet Evolution; editor-in-chief of 21st Century IT; and managing editor, sections, at CRN. She has also written for eWeek, Baseline Magazine, Redmond Channel ... View Full Bio

These improvements to the so-called healthcare system, by shifting care from fees to value, is both superficial and profoundly misguided. It's fixing a fundamentally broken system on its surface. That is, the US healthcare system is in actuality a diseasecare system where almost all economic resources are spent on treatment and management of disease instead of its prevention. It causes enormous wastes of money and human suffering and carnage. An example of this is the cancer industry where the war on cancer is predominantly a highly profitable business venture that needs to be maintained no matter what the facts are (google/bing "A Mammogram Letter The British Medical Journal Censored"). You can't make significant changes to a self-regulating, self-serving business that is both sustained and enabled by the management of disease.

I agree with you Li Tan, healthcare does not need measuring its value, what is needed is to draw the necessary information from the data obtained. This helps in curtailing a lot of spending by measuring the value of healthcare and channeling this money in bettering the healthcare of people. Efficient use of resources helps a lot since it helps in actually achieving the desired goal which is bettering the healthcare system in the country.

@SachinEE: I believe we can measure value, to a point. For example, healthcare organizations are beginning to measure whether certain people who have back surgery live better-quality lives than people who have physical therapy and other treatments after six months. The measurement here is in the quality of life. Personally, I've known people who have had back surgery: In one case, he would have been crippled because the surgeon discovered a severed nerve and something as minor as a sneeze could have caused him to become paralyzed. In several other cases, back surgery didn't do anything to relieve my friends' pain. They seem to still be on the same pain-relieving medications, still need P/T, and actually ache more when it rains because of the incisions. That's one kind of value measure. Another might have to do with medical tests: Do all patients who get MRIs REALLY need these tests or is it a CYA or typical next-step doctors recommend for no clear-cut medical reason? In some cases, that could well be the case and healthcare systems are investigating which instances demand MRIs (for example) and in which cases an MRI is unnecessary.

The big question is can we really measure the value of the health data? Every one has a right to health services and they should affordable. Health is a very sensitive issue that needs to be addressed. It is good that they are planning on improving the nation's health care system as this will help in saving the lives of many sick patients. The health care providers should concentrate on the value of the health care as opposed to the fees that are meant to be incurred.

I am not sure, but think both sides of the political equation agree US healthcare costs are too high. The Washington Post wrote an article including 21 graphs comparing the costs of various treatments in the US against their counterparts in other countries. For example, in 2012 the cost of an average physician visit in the US was $68 to $126; $30 in Canada. Hip replacement in the US cost between about $25K to $88K in 2012 (hospital and physician) vs. about $12K in UK, $28K in Australia. You get the idea...!

That said, I don't know how the costs of medical school differ. Nor have i seen arguments about how much some of the more expensive hospitals/research schools put back into research initiatives. That's the age-old argument, of course. Seems there must be some kind of balance somewhere.

IMHO, the move to measure value is important. I think most of us know someone who's had unnecessary treatments, surgeries, or tests. Just because a provider can perform a test or operation, doesn't always mean it's the right thing to do. OTOH, we have to be careful that beancounters aren't put in charge of healthcare. Do we really want accountants or actuaries deciding whether Grandma has the 'right' to a hip replacement? It's a very tricky area, morally and ethically.

Much of the debate and demagoguery over ACA has included an underlying premise that the market is a driving force to reduce healthcare costs. Whether correct or not, without an accurate means to transparently measure healthcare results then market forces falter.

They're related, no, @Li? Healthcare organizations (and payers) want to measure the value of treatments to determine whether one approach is better than another in a set of circumstances, using analytics and big data to track and analyze those circumstances and results.

So, in the case of knee replacement, not all patients who are recommended to get their knee replaced actually should have the surgery. In some cases, they may need to lose weight and/or exercise more. In some, their quality of life will not improve with a new knee. In some, knee replacement will vastly enhance their lives. Using analytics and big data to track and analyze the wide array of datapoints, providers and payers then can measure the value of these treatments based on patients' situations/symptoms, etc. I FIRMLY believe the ultimate decision should lie with the patient and his/her doctor, but opening patients' eyes to the fact that surgery is not a cure-all is vital -- as Dartmouth plans to do (shown in this article). I've seen a lot of people who had needless back surgery. They had the same (or even more) pain as before the operation, still require several medications to control swelling/pain, and continue to do physical therapy, stretches, etc., so it's hard to see whether there was any benefit. I've got a handful of friends, otoh, who had back surgery and their lives improved dramatically, including someone who had a severed nerve casing and who could have become paralyzed by a mere sneeze. It's easy to measure the value for him!

The major point of healthcare is not measuing value itself but to draw valuable conclusion from it. It's not about data gethering/value measuring but big data analytics. Can we transform smoothly from value measuring to health wisdom and accurate diagnostics?

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